Written answers

Wednesday, 2 December 2015

Department of Finance

State Bodies Code of Conduct

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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57. To ask the Minister for Finance the rules, regulations and protocols applying to senior executives in State or semi-State companies relating to receiving and declaring benefits-in-kind, gifts, etc, particularly where conflicts of interest may arise in terms of discharging of duties or if there are tax implications; if he will provide a detailed list of the gifts, benefits, services, club memberships, etc, that may constitute benefit-in-kind and that should either not be accepted at all or publicly declared; and if he will make a statement on the matter. [43094/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that, with effect from 1 January 2004, PAYE, PRSI and USC must be operated by employers in respect of the taxable value of benefits-in-kind such as private use of a company car, free or subsidised accommodation, preferential loans, the payment of club subscriptions, medical insurance premiums and other non-cash benefits provided by them for their employees.

In addition any payments, gifts or benefits given to an employee, in relation to the exercise  of the duties of their employment, by a third party connected with the employer are also chargeable to PAYE, PRSI, and USC. Where a benefit is provided to an employee by such a third party, that person is responsible for accounting for the PAYE, PRSI, and USC.

Benefits which are provided by a third party will not give rise to an income tax  charge where:

- the provider of the benefit and the employer of the individual are not connected, either directly or indirectly, in any way,

- there is no reciprocal arrangement or scheme in place between the third party and the employer or anyone connected with the employer, and

- the employer of the individual has not incurred, either directly or indirectly, any expense in relation to the benefit

Details are available within Revenues Employers guide to BIK which is available at the following address:

I am also advised by the Revenue Commissioners that a form of capital acquisitions tax called gift tax is payable on the market value of a gift, which includes real property or the free use, occupation or enjoyment of property. There are various lifetime tax-free thresholds applicable, depending on the relationship between the donor and the beneficiary, below which gift tax is not payable. Gift tax on any amount above the particular threshold is currently charged at the rate of 33%. The threshold that applies to gifts between unrelated parties is currently €15,075.

There is a cumulative annual exemption of €3,000 for gifts taken by any one person from any one donor in each calendar year.

I am advised by my colleague the Minister for Public Expenditure and Reform that the Ethics in Public Office Act 1995 sets out, in Schedule 2, the registerable interests which must be declared by senior public officials and those in designated positions of employment or designated directorships. Such interests include certain gifts received by such persons. Declarable interests also extend to the interests of the spouse or child of the person of which he or she has actual knowledge and which could materially influence the person in or in relation to the performance of the functions of the position. In any case where such a function falls to be performed and he or she has knowledge that he or she or a connected person has a material interest in a matter to which the function relates, the official is not permitted to perform the function unless there are compelling reasons requiring him or her to do so.

Where a person to whom the 1995 Act applies has an interest that is not specified in the Second Schedule or has actual knowledge that his or her spouse or a child of the person or of his or her spouse has such an interest, the person may at any time prepare a statement of the interest and furnish it to the appropriate person or persons to whom such a statement is required.

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